The only reason I ever doubted it was behavioral was because he was using the pee pads consistently for a few weeks or so when we first moved in. Maybe the more the cats peed, the more he thought that was OK.
The smell of the cat pee would be a huge factor in the pup going in the house. Even for a completely housetrained dog, the smell of another animals pee would be a very enticing place to pee.
Right now I take him out about every 4 hours. He has also started signaling to me when he has to go sometimes and I hadn't taken him out yet, so I thought he was getting better. I also agree that the pee pad could be confusing, but I wanted an option in case he "physically" couldn't hold his bladder while I'm at work since he is still somewhat young. I was OK with it when he had accidents at our last apartment because he was only 4 months or so. But maybe where I failed is not crating him. I kept him in my bathroom vanity area with tarp covering the floor and he was allowed to go anywhere on that tarp. I put potty pads down in a specific area on the tarp hoping to entice him there, but he would just shred those with his teeth.
At 8 months old he should be physically able to hold it for quite a while. At 8 months old my pup was able to hold it until I got home from work. Because your guy is used to peeing in the house he'll need to be taught to hold it. Crate training/confining him helps with this because dogs have a natural instinct to not potty where they eat and sleep. So he'll want to hold it. They don't have this same instinct for going inside or outside, and until you teach them that those are 2 different things they really don't get it.
Keeping him in a small room is fine. I used a 3'x3' play pen, gave him enough room to move around and play a bit, but not enough room for him to be ok with going potty in there. I fed him his meals in the play pen and kept a bed, toys, water, and gave him treats in there so it would feel more like a den or bedroom type space for him.
What type of dog? and how big is he?
As for the cats, we're actually going to be boarding them with someone for several months until we can help resolve this issue. You're right, the cats are making this problem very difficult to nip in the butt. And we've tried everything with the cats-many litters, many boxes, frequent cleanings...I have considered hiring someone to come in to take him out once the cats are out, but how would you know it's OK to stop having that person come after a while? Also, have you heard of people crate training a dog for 8 hours while they're at work? I never wanted to which is why I kept him in my bathroom area instead. But seems that has set me up for failure...
Also, in regards to crate training, do you crate on weekends even when you are home with the dog?
Wish I could offer some advice on the cats, but I have zero knowledge on those fuzzy little guys, we had cats when I was growing up but they always just went in their litter box. And all I've ever heard from cat people is that they train themselves... apparently not. lol.
Knowing when to stop having someone come during the day is a play it by ear type thing. You'll probably know when it's time but as a guideline at his age I would say if he goes 2 weeks without any kind of accident you can try dropping the midday visit.
I have heard of people crating their dog all day. I didn't do it, felt it was too confining, as I mentioned above I went with a play pen. As he got more trust worthy I worked him up to have free reign of the bedroom, then bedroom and living room and then the whole house. I would crate or put him in his play pen on the weekends sometimes if I couldn't watch him consistently or had to go out of the house without him.
He did however sleep in his crate at night until I could trust him to not pee on my bed.
Regardless if you keep him in the crate during the day or not I would highly recommend crate training him now. It can be very useful to have a safe place the pup can go. My guy is 1 year old now and has constant access to his crate, he goes in there to relax, leaves bones in there for later, hides if there are too many people in the house and he wants to get away. Plus you may need to have him in the crate for traveling, vet visits, boarding, or a variety of other reasons in the future. It's a good thing for him to learn now and be comfortable with in case you need to use it. For instance I fly out to visit my parents and siblings over Christmas, took my pup with me on the flight. He needed to be in his crate while in the airport and on the plane. Because he is some comfortable with his crate life was super easy, he didn't make a peep the entire flight and slept pretty much the whole time. He got many compliments from the flight crew and other passengers about how good a boy he was being. lol!